Some months ago, I posted an entry in which I praised Delta Air Lines for effectively communicating a number of changes to their SkyMiles loyalty program. These changes were largely more restrictive in nature, making it more difficult to achieve higher-level (or elite) status. In that post I opined that while these changes could be perceived as negative (and probably were), the impact was mitigated by a communication campaign that was clear, transparent and timely.

Well, times have changed somewhat. I recently booked another trip on Delta and received the typical email confirmation – to which I initially paid little attention. But later, I happened to scroll to the bottom of the confirmation and noticed that a previous benefit of my status in the program, i.e., the waived baggage-check fee, had been changed. Apparently, ticket price can now trump SkyMiles status in determining whether your first bag rides on the airplane for free – or not.

My reaction to this change was not really indignation, or “how could they do this to me?” Rather, I was surprised that this change had been made with very little advance notice or explanation. Furthermore, while I really have little debate with airlines doing what they can to be profitable, I do find it curious that they would effectively devalue their loyalty program value proposition so casually.

This experience was put into further perspective by a development in our own business. One of our key clients decided to reduce the point awards associated with certain key indicators. These changes were made rather quietly over a period of months, so they apparently did not capture the attention of most of the program participants.

However, during the recently completed holiday season, in which large numbers of points were redeemed, the impact of these changes became clear. In effect, the participants “woke up” to the fact that they had not accumulated point balances consistent with their past history. As a result, some desired redemption items were not affordable. Similar to my experience with Delta, these program participants felt that this client’s incentive program had been devalued.

Together, I think that these two examples provide important messages for incentive program sponsors.

• First of all, it’s perfectly within a sponsor’s right to change the rules. Business conditions and objectives change and programs can and should evolve accordingly.
• While rules change, transparency and clarity of communication should not. It’s important to tell program participants about planned changes – before they happen.

If incentive program sponsors keep these things in mind, they can better anticipate participants’ reactions – and perhaps take other actions to mitigate those reactions. For example, if the point award for one key indicator needs to be reduced, another (or new) key indicator point value might be increased – with attendant benefits to the sponsor and reduced impact on participants’ perceptions. And even if a negative change can’t be offset, it’s important to include assurances that your participants are still important and valued.

We’re here to help you manage the evolution of your loyalty or incentive program – please contact us here or at 800.621.9745.